State-backed Chinese technology conglomerate Tsinghua Unigroup Ltd is preparing a $23 billion bid for U.S. memory chip maker Micron Technology Inc, The Wall Street Journal reported, in what would be the biggest Chinese takeover of a U.S. company.

State-backed Chinese technology conglomerate Tsinghua Unigroup Ltd is preparing a $23 billion bid for U.S. memory chip maker Micron Technology Inc, The Wall Street Journal reported, in what would be the biggest Chinese takeover of a U.S. company.

Unigroup is prepared to bid $21 per share for Micron, which is at a 19.3 percent premium to the stock’s close on Monday, the Journal reported, citing people familiar with the matter. (http://on.wsj.com/1fE2GQm)

The Journal earlier reported that a bid had been submitted. A Micron spokesman however said that while the company did not comment on rumours or speculation, it had not received an offer.

A Tsinghua Unigroup spokesman said he did not know anything about the reported deal, while a person close to Unigroup said it was not clear it had received Chinese regulatory approval for an overseas takeover.

A successful bid for Micron would consolidate Unigroup’s position as a champion for China’s technological development, after it struck deals and research partnerships with international firms in the semiconductor industry.

The company is controlled by Tsinghua University in Beijing, which counts President Xi Jinping among its alumni, and is backed by China’s central government.

China has attached strategic importance to the development of a domestic server and networking equipment sector amid fears of foreign cyberspying.

But any foreign takeover of Idaho-based Micron – the last major U.S.-based manufacturer of DRAM chips used in personal computers – would likely have to pass a review by the Committee on Foreign Investment in the United States (CFIUS), which reviews deals for national security implications.

Micron makes both dynamic random access memory chips, or DRAM, and NAND memory chips for storing music, pictures and other data on smartphones, cameras and other mobile devices.

Acquiring Micron’s cutting-edge memory manufacturing technology would be a major advance for China’s modest but improving chip industry headed by Unigroup.

With a roots as a private equity fund, Unigroup transformed into a serious semiconductor player after it bought Chinese chipmakers RDA Microelectronics and Spreadtrum in deals totalling $1.6 billion last year. When Unigroup received a $1.5 billion investment from Intel Corp in October, the two sides pledged to cooperate on research and further Chinese technology.

DWINDLING U.S. PLAYERS

None of the world’s top memory chip manufacturers are based in China although South Korea’s SK Hynix has a plant in Wuxi and Samsung Electronics Co Ltd, the global market leader also from South Korea, last year began full-scale production at a new NAND chip factory in Xi’an.

Micron has manufacturing plants and a sales office in Taiwan, and indirectly holds a 20 percent stake in Inotera Memories Inc, a joint venture with Nanya Technology Corp. If Micron became a Chinese-owned company, Taiwanese rules would require it to re-submit its investment application for review.

The memory business in recent years has seen rapid consolidation. In May, Hewlett-Packard Co sold a controlling 51 percent stake in its China-based data-networking business to Unigroup for at least $2.3 billion, forming a partnership designed to create a Chinese technology powerhouse.

Last year Intel Corp acquired a stake in two mobile chipmakers through another deal with Unigroup, which owns the companies.

A Micron deal could also face scrutiny from China’s National Development and Reform Commission, which must approve outbound investments worth more than $2 billion or those in sensitive industries.

Billionaire hedge fund manager David Einhorn said in an investor letter on Monday that Micron would be worth more than Netflix Inc within the next few years. Netflix was worth $42.9 billion at the close on Monday.